maybe they did - -King & Spalding Hit With Suit Over Representation Of ZTE
By Melissa Daniels
Law360, Los Angeles (May 30, 2017, 9:27 PM EDT) -- Form Holdings Corp. sued King & Spalding LLP and two of its partners in New York state court on Friday alleging their previous defense of Chinese telecommunications firm ZTE Corporation against breach of non-disclosure claims “reeked of deceit, obstruction and abuse.”
Form, previously known as Vringo Inc., had sued ZTE in New York federal court after it allegedly disclosed sentivie information included in a non-disclosure agreement reached in 2013 to settle Vringo’s international patent infringement litigation. The company now accuses King & Spalding of engaging in “chronic and extreme pattern of deceit" while defending ZTE, including concealing violations of a temporary restraining order and the disclosure of the protected material.
“From the outset, it was defendants’ objective to shield their client from certain liability while simultaneously prolonging the lawsuit, through any means necessary, so that Form would ultimately succumb to financial and political pressure,” the suit says.
In addition to the firm, the suit names partners Robert F. Perry and Paul A. Straus, who Form says were the lead attorneys representing ZTE in the non-disclosure action.
Friday’s lawsuit was filed on the heels of a complaint filed by former associate David A. Joffe, who claims King & Spalding fired him after he raised concerns about alleged false statements and representations two partners had made while representing ZTE in a case over whether the company illegally disclosed confidential information.
The firm has denied that its lawyers knowingly made any false statements to the court in the ZTE case, and also said Joffe’s termination was unrelated to the litigation. King and Spalding’s chief marketing officer Kevin Cavanaugh told Law360 on Tuesday the lawsuit is rehasing events that were already subject to extensive motion practice, briefing and hearings before the trial court — in addition to relying on Joffe’s suit.
“We stand by our previous comments on the allegations in the Joffe lawsuit, and we deny that our lawyers knowingly made any false statements to the court in the Vringo v. ZTE litigation,” Cavanaugh said.
The underlying federal action commenced in July 2014, a few months after ZTE filed an antitrust complaint against Form in China. Form sought a TRO and preliminary injunction to prevent ZTE from disclosing protected material from their non-disclosure agreement, saying ZTE’s Chinese complaint relied on sensitive information in the nondisclosure agreement, and that ZTE also gave the information to foreign government regulators and to Google, with which Form was also involved in litigation.
After Form’s suit was filed, Straus told the court that his client didn’t share the protected material with any competitors in violation of the nondisclosure, and that they only filed it with the Chinese court, the complaint says.
“Nothing, however, could have been further from the truth,” Form said. “Indeed, Straus’ representation was entirely false. Both Straus and Perry knew of its falsity or, at a minimum, recklessly disregarded the strong probability that this representation was false.”
The court issued a TRO preventing ZTE from using any information in violation of the non-disclosure agreement, Form’s complaint says. Then Straus again said in writing that the Chinese antitrust complaint was the only matter where ZTE used the at-issue protected material, the complaint said.
Later on, the firm sent the protected material to a public relations firm and more than 100 ZTE employees, the complaint says. The firm then told the court in an opposition brief that ZTE has fully complied with the TRO, which Form now says was another misrepresentation.
“Defendants never informed Judge Kaplan or Form concerning these violations of the TRO despite being duty-bound to do so,” Form says.
Form further accuses the firm of submitting a false witness statement and obstructing its discovery efforts to bring the TRO violations to light. It also claims U.S. District Judge Lewis A. Kaplan, who oversaw the action, “routinely admonished” the King & Spalding attorneys for their litigation tactics.
Though Judge Kaplan issued a sua sponte order asking Perry and Straus to show they should not be sanctioned, they moved to withdraw from the litigation in August 2015, Form says. The motion was still pending when Form and ZTE reached a settlement in December 2015 — but the firm wasn’t involved in those negotiations, the complaint says.
Claims include a violation of New York judicial law and fraud by omission against all defendants, fraud and intentional misrepresentation against Straus and the firm, and aiding and abetting fraud and vicarious liability against the firm.
Representatives for the plaintiffs couldn't immediately be reached for comment on Tuesday.
Form is represented by Leo V. Leyva, Joseph Barbiere nad Jason Melzer of Cole Schotz PC.
Counsel for the defendants wasn’t immediately available.
The case is Form Holdings Corp. v. King & Spalding LLP, case number 652887/2017 in the Supreme Court of the State of New York, County of New York.
--Additional reporting by Vin Gurrieri and Matthew Bultman. Editing by Philip Shea.
